This document discusses three case studies of conducting user fee studies for municipalities. The first case study was a comprehensive user fee study for a city that identified $1.2 million in additional annual revenue from fee increases and new fee programs. The second case study used a market analysis approach comparing city programs to benchmark cities, which resulted in some program reductions and fee adjustments netting $200,000 more revenue annually. The third case study was a global review of all revenue generating programs including taxes, fees, and rentals to identify opportunities by comparing to benchmark cities.

1. Revenue Opportunities Through User Fees Thursday, June 23, 2011

2. Introduction Chris Fisher – Willdan Financial Services: User Fee Studies, Cost Allocation Plans Special District Formations CFDs, Assessments, Fire, BIDs Utility Rate Studies Water, Wastewater Economic and Fiscal Analysis Impact Fees

3. Case 1: Comprehensive User Fee Study Undertaken as part of annual budget process First comprehensive review of citywide fee programs in many years Review and analysis of fee-based services Coordinated with cooperation of Finance Department staff City goal: find $1.5MM to $2MM revenue

4. Study Objectives Identify true cost of providing user fee services Survey of services for which fees are in place Understand the service delivery processes Analysis of staff involved, time survey, and cost Determine level of subsidy and revenue impacts Identify new fees, cost recovery strategies Appropriately distribute overhead costs Develop defensible fee schedule

5. Findings Developed revenue projections based upon estimated activity levels, new fees City addressed more formal fee policies during budget workshops Identified approximately $1.2MM in additional revenue through fee increases Recommended implementation of two new fee programs

6. Case 2: Market Study Approach Programmatic cost review Market analysis - comparison of city programs to neighboring or similar profile cities Ten benchmark cities Close proximity, similar program offerings, profiles Targeted recreation programs, sports, leagues, classes, arts programs, etc Graphic presentation of results, cost per hour of programs calculated for comparison purposes

7. Approach and Considerations Highlight where fees are too low Identify potential program reductions Low participation Similar offerings from other cities, lower cost Alternatives for participants Selected comparison city subsidy policies or true costs are not known

8. Findings Some program offerings were reduced or eliminated Lower cost alternatives, participation Market saturated for some programs City policy to continue subsidizing indirect costs of running programs Only target direct costs for full recovery Netted approximately $200K per year based upon reductions, fee adjustments